Whitney Bank v. Pullum-Cecilio, LLC et al

Filing 25

ORDER, GRANTING 13 Motion for Summary Judgment filed by Whitney Bank; and GRANTING in part and DENYING in part Whitney Bank's motion for reasonable attorneys' fees. Signed by Judge Callie V. S. Granade on 6/15/2015. (mab)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
WHITNEY BANK, a Mississippi
state chartered bank,

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) CIVIL ACTION NO. 15-0002-CG-M
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Plaintiffs,
vs.
PULLUM-CECILIO, LLC., et al.,
Defendants.

ORDER
This matter is before the Court on the motion for summary judgment
filed by Plaintiff, Whitney Bank (“Whitney Bank”) (Doc. 13), as well as
Defendants’ response in opposition thereto (Doc. 16), and Whitney Bank’s
supplemental response (Doc. 20). For the reasons stated below, the motion for
summary judgment is GRANTED. Also before the Court is Whitney Bank’s
motion for reasonable attorneys’ fees (Doc. 13), for the reasons stated below,
that motion is GRANTED, in part, and DENIED, in part.
BACKGROUND
This case arises from an unpaid promissory note and a financial
institution’s attempts to collect the debt from both the borrower and its
guarantors. Plaintiff Whitney Bank brought this action against defendants,
Pullum-Cecilio, LLC., (“Pullum-Cecilio”), Bart R. Pullum (“B. Pullum”),
Rebecca A. Pullum (“R. Pullum”), Shan Cecilio (“S. Cecilio”) and the now
deceased, Frank Cecilio (“F. Cecilio”), alleging state-law causes of action for
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breach of contract regarding their repayment obligations under a Renewal
Promissory Note (“the Note”). Federal jurisdiction was properly predicated on
28 U.S.C. § 1332, as the Complaint sufficiently alleged complete diversity of
citizenship between Whitney Bank and each defendant, and that the amount
in controversy exceeds the $75,000 jurisdictional threshold.
On April 28, 2015, Pullum-Cecilio filed for voluntary Chapter 11
bankruptcy in the United States Bankruptcy Court for the Northern District
of Florida, Pensacola Division, as Case No. 15-30477 (Doc. 21), which
automatically stayed this case as to Pullum-Cecilio. (Doc. 22). Furthermore,
during the planning meeting on March 30, 2015, parties advised the Court of
the death of Frank Cecilio. (Doc. 15). Whitney Bank’s motion for summary
judgment only involves S. Cecilio, R. Pullum and B. Pullum, (the
“Defendants”). (Doc. 13).
THE AGREEMENTS
On November 20, 2013, Defendant Pullum-Cecilio executed and
delivered to Hancock Bank, (now known as “Whitney Bank”), a Renewal
Promissory Note in the principal amount of $864,679.68 (Buntin aff., Doc. 132, Exh. A, ¶ 1). The Renewal Note specified that interest would accrue at
eight percent per annum on the outstanding principal balance due. Monthly
payments of $9370.00 would commence on December 15, 2013. (Id. at ¶ 3).
The Renewal Note required all unpaid principal, interest and expenses

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outstanding to be paid in full as of December 14, 2014.1 (Id.) Interest accrued
on the Renewal Note at eight percent (8%) per annum on the outstanding
principal balance due. (Id. at ¶ 4). In case of default, “interest shall accrue
and Maker will pay interest at the rate of eighteen (18%) percent per annum
on the outstanding principal balance due.” (Id.).
The Renewal Note was secured by collateral, including mortgages on
multiple pieces of real estate in Santa Rosa County, Florida. (Id. at ¶ 2). The
Renewal Note stated that the Maker, Pullum-Cecilio, waived “demand,
presentment, protects, notice of non-payment, notice of protest and any and
all lack of diligence or delay in collection or the filing of suit hereon which
may occur.” (Id. at ¶ 9.1). The Renewal Notice also contained a costs of
collection provision, which stated in the event of default, threatened event of
default, or the Renewal Promissory Note “is collected in whole or in part
through legal proceedings of any nature,” then, “added to the unpaid
principal balance hereof all costs of collection, including, but not limited to,
reasonable attorneys’ fees” (Id. at ¶ 10). The Renewal Note’s choice of law
provision provided that the governing law, venue and jurisdiction is
Alabama. (Id. at ¶ 14).
The record also establishes that Rebecca Pullum and Shan Cecilio
signed Guaranties on November 18, 2013 backing Pullum-Cecilio’s Renewal
Note. (Buntin aff., Doc. 13-2, Exhs. D – E). On November 20, 2013, Bart R.
The Renewal Note was a “balloon payment mortgage,” meaning the note would not fully
amoritize over the loan period, but rather the entire sum would be due at the end of the
agreed period.
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Pullum also signed a Guaranty Agreement guaranteeing Pullum-Cecilio’s
Renewal Note. (Buntin aff., Doc. 13-2, Exh. C) Each Guaranty Agreement
had an identical provision that stated:
Guarantor hereby absolutely and unconditionally
guarantees to Lender the due, regular and punctual payment
of the Obligations, including, without limitation, any sum or
sums of money now owed to Lender in connection with the
Renewal Promissory Note and Mortgage referred therein…
Buntin aff. Doc. 13-2 Exhs. C at ¶ 1; D at ¶ 1; and E at ¶ 1. Each Guaranty
Agreement provided, “Guarantor agrees that Lender shall not be required to
pursue or foreclose the Mortgage before making a claim or asserting a cause
of action against Guarantor under this Agreement.” (See Buntin aff. Doc. 132 Exhs. C at ¶4; D at ¶4; and E at ¶4). Additionally, the Guaranties agreed to
pay “reasonable attorneys’ fees arising from” the agreement. (Id. at ¶19). The
Guaranties are likewise governed by Alabama law. (Id. at ¶15).
THE BREACH
By the terms of the Renewal Note, Pullum-Cecilio was to repay the
$864,679.68 in principal plus any accrued interest to Whitney Bank on
December 14, 2014. (Buntin aff., Doc. 13-2, Exh. A at 1). However, PullumCecilio failed to repay the principal and interest on that date. (Buntin aff. at
3). The omission constituted default under the Renewal Note. (Id., Exh. A at
2 (listing as an even of default “in the payment of interest or accrued late
charges thereon as and when the same become due and payable in
accordance with the terms”)). The Renewal Note provided that such a default
triggered accrual of interest at the 18% per annum default rate (per diem
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amount of $411.91) on the outstanding principal balance. (Id. at 1-2). Plaintiff
further claims attorneys’ fees and costs incurred in collecting money owed
pursuant to the Renewal Note, in the amount of $5,874.84 billed hours, plus
an additional $797.50 of unbilled time. Plaintiffs’ attorney further contends
“that 15% of the outstanding balance as of December 29, 2014, or
$126,202.88, is a fair, reasonable and necessary attorneys’ fee to collect this
outstanding indebtedness, reduce it to judgment and enforce the judgment.”
(Christian aff., Doc. 13-3, at 4).
Pullum-Cecilio’s default on the Renewal Note implicates the
Guarantors and their respective agreements to “absolutely and
unconditionally” guaranteed payment to Whitney Bank of all obligations
owed by Pullum-Cecilio (specifically, promissory notes, interest, fees,
attorneys’ fees, and costs of collection). Whitney Bank also made an
uncontested showing that none of the individual defendants made payments
to Pullum-Cecilio’s indebtedness to Whitney Bank under the Renewal Note.
(Buntin aff. at 3 – 4).
I. SUMMARY JUDGMENT STANDARD
The Court may grant summary judgment “if the movant shows that
there is no genuine dispute as to any material fact and the movant is entitled
to judgment as a matter of law.” FED. R. CIV. P. 56(a). The substantive law
applicable to the case determines what is material. Lofton v. Sec’y of Dep’t of
Children & Family Servs., 358 F.3d 804, 809 (11th Cir. 2004), cert. den., 534

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U.S. 1081 (2005). If the nonmoving party fails to make “a sufficient showing
on an essential element of her case with respect to which she has the burden
of proof,” the moving party is entitled to summary judgment. Celotex Corp. v.
Catrett, 477 U.S. 317, 323 (1986).
In evaluating the movant’s arguments, the court must view all
evidence and resolve all doubts in the light most favorable to the nonmovant.
Burton v. City of Belle Glade, 178 F.3d 1175, 1187 (11th Cir. 1999). “If
reasonable minds might differ on the inferences arising from undisputed
facts, then [the court] should deny summary judgment.” Hinesville Bank v.
Pony Express Courier Corp., 868 F.2d 1532, 1535 (11th Cir. 1989) (citation
omitted). The basic issue before the court then is “whether the evidence
presents a sufficient disagreement to require submission to a jury or whether
it is so one-sided that one party must prevail as a matter of law.” Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 251–52 (1986). The mere existence of any
factual dispute will not automatically necessitate denial of a motion for
summary judgment; rather, only factual disputes that are material preclude
entry of summary judgment. Lofton, 358 F.3d at 809.
II. ANALYSIS
a. Governing law
As an initial matter it is important to note the controlling law in this
case. This case is before the Court due to diversity jurisdiction and the Court
must apply the laws of the state in which the federal court sits. See Manuel

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v. Convergys Corp., 430 F.3d 1132, 1139 (11th Cir. 2005) (citing Klaxon Co. v.
Stentor Elec. Mfg. Co., 313 U.S. 487, 496 (1941)). Alabama courts follow the
traditional conflict-of-law principles of lex loci contractus and lex loci delicti.
Lifestar Response of Ala., Inc. v. Admiral Ins. Co., 17 So.3d 200, 213 (Ala.
2009). In Alabama, the laws of the state where the contract was made govern
contract claims, unless the contracting parties chose a particular state's laws
to govern their agreement. Cherry, Bekaert & Holland v. Brown, 582 So.2d
502, 506 (Ala. 1991). In this action, the contracts were made in Alabama and
the parties chose the State of Alabama (Buntin aff. Exhs. A at ¶ 14; C at ¶ 15;
D at ¶ 15; E at ¶15.). Therefore, the laws of the State of Alabama apply.
Under Alabama law, loan documents are governed under contract law.
See Penick v. Most Worshipful Prince Hall Grand Lodge F & A M of
Alabama, Inc., 46 So.3d 416, 428 (Ala. 2010) (construing terms of a mortgage,
notes and modification agreement). In that regard, “[i]f the terms within a
contract are plain and unambiguous, the construction of the contract and its
legal effect become questions of law for the court and, when appropriate, may
be decided by a summary judgment.” Diamond v. Bank of Alabama, 43 So.3d
552, 563 (Ala. 2009) (construing terms of a promissory note, guaranty, line of
credit and letter of credit and finding documents underlying loan transaction
were not ambiguous) (citations omitted). See Peppertree Apartments, Ltd. v.
Peppertree Apartments, 631 So.2d 873, 878 (Ala.1993) (“The intention of the
parties controls when a court construes the terms of a promissory note, and

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that intention is to be derived from the provisions of the contract, if the
language is plain and unambiguous.”). In this case the Defendants do not
argue that the terms of the Renewal Promissory Note are ambiguous.
Furthermore, when Pullum-Cecilio defaulted on the Renewal Note, the
individual Guarantors became liable.
In order to prevail on its breach of guaranty agreement claim, Whitney
Bank must establish the (1) existence of each of the individual guaranties, (2)
default on the underlying Note by Pullum-Cecilio, and (3) nonpayment by the
guarantors. See Branch Banking and Trust Co. v. Broaderip, 2011 WL
3511774, 3 (S.D. Ala. Aug. 11, 2011) (“Every suit on a guaranty agreement
requires proof of the existence of the guaranty contract, default on the
underlying contract by the debtor, and nonpayment of the amount due from
the guarantor under the terms of the guaranty.”) quoting Delro Industries,
Inc. v. Evans, 514 So.2d 976, 979 (Ala. 1987); see also, Vision Bank v.
Algernon Land Co., LLC, 2011 WL 1380062, *7–8 (S.D. Ala. Apr. 12, 2011);
Sharer v. Bend Millwork Sys., Inc., 600 So.2d 223, 225–26 (Ala. 1992).
The guaranty at issue is a continuing guaranty. Generally, an
additional element of notice of Pullum-Cecilio's default to the guarantor(s)
must also be proven. However, here the guarantors, B. Pullum, R. Pullum
and S. Cecilio, waived “[p]resentment, protest, demand, and notice of protest
and demand of any collateral, and of the exercise of possessory remedies or
foreclosure on any and all collateral received by Lender.” (Buntin aff. Exhs.

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C, D, and E at ¶6). In that regard, “[t]he language of the guaranty is
controlling in determining whether the holder of the guaranty is under a duty
to notify the guarantor of a default by the principal, and notice need not be
given when the terms of the guaranty expressly dispense with the need for
it.” Wells Fargo Bank v. Richard D. Horne, LLC, 2010 WL 5376341, *3 at n.1
(S.D. Ala. Dec. 27, 2010); see also RBC Bank v. CMI Electronics, Inc., 2010
WL 2719096, *2 (M.D. Ala. Jul. 8, 2010) (“[i]n the case of a continuing
guaranty, it is also necessary to prove that the guarantor received notice of
the debtor's default, unless that right has been waived by the terms of the
guaranty contract.”). Therefore, due to the clear waiver by each guarantor,
Whitney Bank did not need to provide notice of the default.
Moreover, when a contract is “one of absolute guaranty,” as in this
case, “the failure of the principal to pay the debt within the time provided in
the principal contract fixed the liability of the guarantors, without regard to
the question of the principal's solvency or insolvency, and the plaintiff was
under no duty to the guarantors to pursue its remedy against the principal as
a prerequisite to its right to recover against the guarantors.” Ehl v. J.R.
Watkins Medical Co., 112 So. 426, 426 (Ala. 1927); In re Southern Cinemas,
Inc., 256 B.R. 520, 527 (Bkrtcy. M.D. Fla. 2000) (holding under Alabama law
that “[i]n order to be entitled to enforce the obligation of the contract of
guaranty, the creditor must show that the guaranteed debt or obligation is
due.”).

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As detailed above, the record reveals that Pullum-Cecilio executed a
Renewal Promissory Note with Whitney Bank. The Guarantors, B. Pullum,
R. Pullum, and S. Cecilio, absolutely and unconditionally guaranteed the
payment of indebtedness owed by Pullum-Cecilio under the Renewal Note.
When Pullum-Cecilio defaulted, these Guarantors became liable to Whitney
Bank. There is no evidence that the contract is invalid, nor do the Defendants
contest the validity of the note.
b. Defendants argument in opposition to summary judgment
In response to Whitney Bank’s motion for summary judgment,
Defendants do not contest the validity of the contracts themselves, but rather
argue that the motion is premature. Defendants invoke Federal Rule of Civil
Procedure 56(d), which provides that “[i]f a nomovant shows by affidavit or
declaration that, for specified reasons, it cannot present facts essential to
justify its opposition, the court may ... defer considering the motion or deny
it.” FED. R. CIV. P. 56(d)(1). In an affidavit filed pursuant to Rule 56(d),
Defendants’ counsel served opposing counsel with a production request and
had yet to receive the requested documents as of April 2, 2015, the date of the
filing. (See Peterson aff., Doc. 16). Included in the production request was
Defendants’ request for information specific to the issues raised in
Defendants’ affirmative defenses. Defendants’ counsel avers that “[w]ithout
the requested discovery, the Defendants are not able to fully address the
merits the Motion for Summary Judgment filed by Plaintiff.” (Peterson aff. at

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2).
“The law in this circuit is clear: the party opposing a motion for
summary judgment should be permitted an adequate opportunity to complete
discovery prior to consideration of the motion.” Jones v. City of Columbus,
Ga., 120 F.3d 248, 253 (11th Cir. 1997) (citations omitted). That said, it is not
a prerequisite that all discovery be completed before summary judgment is
entertained. See Fla. Power & Light Co. v. Allis Chalmers Corp., 893 F.2d
1313, 1316 (11th Cir. 1990) (“The district court is not required to await the
completion of discovery before ruling on a motion for summary judgment.”).
In fact, the Eleventh Circuit has counseled that “we expect that district
judges will be open” to Rule 56 motions filed “at an early stage of the
litigation if the moving party clearly apprises the court that a prompt
decision will likely avoid significant unnecessary discovery.” Cordoba v.
Dillard's, Inc., 419 F.3d 1169, 1188 (11th Cir. 2005); see also Reflectone, Inc.
v. Farrand Optical Co., 862 F.2d 841, 843–44 (11th Cir. 1989) (declining to
adopt per se rule prohibiting entry of summary judgment before discovery).
The rule’s text underscores the point by providing that, unless a different
time is fixed by court order or local rule, “a party may file a motion for
summary judgment at any time until 30 days after the close of all
discovery.” Rule 56(b), Fed. R. Civ. P. (emphasis added).
The burden to show entitlement to relief under Rule 56(d) rests with
the Defendants. See, e.g., Virgilio v. Ryland Group, Inc., 680 F.3d 1329, 1338

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(11th Cir.2012) (“Because the burden on a party resisting summary judgment
is not a heavy one, one must conclusively justify his entitlement to the shelter
of [Rule 56(d)] by presenting specific facts explaining the inability to make a
substantive response.”) (citation omitted); Sterk v. Redbox Automated Retail,
LLC., 770 F.3d 618, 628 (7th Cir. 2014) (“The Rule places the burden on the
non-movant that believes additional discovery is required to state the reasons
why the party cannot adequately respond to the summary judgment motion
without further discovery.”) (citation and internal quotation marks omitted).
On this record, the Court finds that Defendants have not met this burden and
further discovery would not change the outcome of this case.
Defendants claim that additional discovery might bolster their five
affirmative defenses. Those defenses are (i) waiver and estoppel, (ii) failure to
mitigate, (iii) real property exceeding the amount owed and alleged Equal
Credit Opportunity Act violations as to (iv) Shan Cecilio and (v) Rebecca
Pullum. (See Doc. 6 at 4 – 5). However, the Renewal Note and the respective
Guaranty Agreements bar all of these defenses.
1. Failure to Mitigate
Defendants’ answer claims as an affirmative defense that Whitney
Bank failed to mitigate its damages by foreclosing on the property at issue
and establish a deficiency claim. Defendants suggest that further discovery
may bolster this defense, however, the Court is unconvinced.

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Alabama courts recognize a duty to mitigate in the breach of contract
context. See, e.g., Neumiller Farms, Inc. v. Cornett, 368 So.2d 272 (Ala. 1979)
(“Generally, the damages recoverable by a non-breaching party will be
measured as though that party had made a reasonable effort to avoid the
foreseeable adverse consequences of the breach.”) But the concept of
mitigation in the breach-of-contract context has rigid, well-defined
boundaries. For example, “the rule does not require an aggrieved party to
sacrifice a substantive right or forego an advantageous opportunity for the
benefit of the breaching party.”Neumiller Farms, 368 So.2d at 276. Nor may
a breaching party utilize the mitigation doctrine to shift the risk of harm to
the non-breaching party. See, e.g., Gradco, Inc. v. St. Clair Cnty. Bd. of Educ.,
477 So.2d 365, 368 (Ala. 1985) (“A party is obligated to mitigate damages only
if they are reasonably foreseeable and the effort to avoid them will not entail
undue risk.”); American Savings Bank, F.A. v. United States, 98 Fed. Cl. 291,
312 (Fed. Cl. 2011) (“The non-breaching party is only required to take
reasonable steps to mitigate damages,” and need not take actions that “do not
limit the harm [but] merely shift it around”).
The fundamental problem with the failure to mitigate affirmative
defense is it would effectively blot out the clear and unambiguous terms of
the contract. Each Guaranty Agreement explicitly stated, “Guarantor agrees
that Lender shall not be required to pursue or foreclose the Mortgage before
making a claim or asserting a cause of action against Guarantor under this

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agreement.” (Buntin aff. Exhs. C, D, E at ¶4). The Defendants cannot add
new and advantageous terms to the agreement after the breach. See, e.g., In
re Kellett Aircraft Corp., 186 F.2d 197, 198–99 (3rd Cir. 1950)(“[t]he rule of
mitigation of damages may not be invoked by a contract breaker ... merely for
the purpose of showing that the injured person might have taken steps which
... would have been more advantageous to the defaulter.”). Thus, the Court
finds that Whitney Bank did not have a duty to mitigate by foreclosing on the
property.
2. Waiver, Estoppel and the Value of Property
Defendants also claim as an affirmative defense, “Plaintiffs claims are
barred by the doctrines of waiver and estoppel.” (Doc. 6 at 4). Relatedly,
Defendants also allege that the “value of the real property exceeds the
amount of debt owed Plaintiff,” and “[p]laintiff is estopped from seeking
deficiency judgment against Defendants.” (Doc. 6 at 4). Again, the terms of
the Renewal Note and the Guaranty Agreements render these arguments
futile. The Guaranty was “absolute and unconditional….Guarantor waives
any and all defenses of Borrower as any defense for Guarantor, other than
the defense of payment in full.” (Buntin aff. Exhs. C, D, E at ¶4).
3. Equal Credit Reporting Act
Finally, as to the alleged violations of the Equal Credit Reporting Act,
15 U.S.C. § 1691 et. seq., the Court is again not persuaded that further

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discovery will change the outcome. The Guaranty Agreement contained a
paragraph-long provision in which each Guarantor:
[C]ompletely and fully releases, remises, acquits and
discharges forever Lender…of and from any and all claims,
demands, actions, causes of action, suits, costs, damages,
expenses and liability of every kind, character or description,
either direct or consequential, at law or in equity, which it
may have note, may have had at the time, heretofore, or may
have at any time hereafter, arising from, resulting from, or in
any manner growing out of or incidental to the Renewal
Promissory Note.
(Buntin. Exhs. C, D, E at ¶24). This provision disallows any possible
counterclaims Shan Cecilio and Rebecca Pullum may have against Whitney
Bank. In signing the agreement Guarantors represented and warranted “to
Lender and covenants that Guarantor has full power and unrestricted right
to enter this Agreement, to incur the obligations provided for herein, and to
execute and deliver the same to Lender, and that when executed and
delivered, this Agreement will constituted a valid and legally binding
obligation of Guarantor, enforceable in accordance with its terms.” (Buntin
aff. Exhs. C, D, E ¶10). Alabama law provides “[w]hen interpreting a
contract, a court should give the terms of the contract their clear and plain
meaning and should presume that the parties intended to do what the terms
of the agreement clearly state.” Brewbaker Motors, Inc. v. Belser, 776 So.2d
110, 112 (Ala. 2000). Additionally, [the Alabama Supreme Court] will
interpret the terms of a contract to give ‘effect to all terms used.’ Sullivan,
Long & Hagerty v. Southern Elec. Generating Co., 667 So.2d 722, 725
(Ala.1995). See also Bd. of Water & Sewer Comm'rs of Mobile v. Bill Harbert
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Constr. Co., 870 So.2d 699, 710 (Ala. 2003) (“The law is settled that this
Court is bound to construe contracts so as to give meaning to all provisions
whenever possible.”). Giving meaning to all of the provisions in the contract,
B. Pullum, S. Cecilio, and R. Pullum, all stated they had full power to enter
the agreement, were bound by the terms and completely released Whitney
Bank of any claims arising out of the Renewal Promissory Note or the prior
notes. No amount of discovery will change the terms of the original
agreement.
Thus, the Court finds that Defendants did not meet the burden to show
that additional discovery would allow them to adequately respond to the
motion for summary judgment. The Court denies Defendants’ relief under
Rule 56(d) and finds that there is an adequate record on which to decide the
motion for summary judgment.
Even casting the facts in a light most favorable to the nonmovants, the
Renewal Note and the Guaranty Agreements are clear. The Court cannot and
will not rewrite the terms of the agreement that the nonmovants breached.
There is no dispute over the contract itself and the Court must construe the
terms as written. Therefore, as the record supports, Whitney Bank
established (1) existence of each of the individual guaranties as to R. Pullum,
B. Pullum and S. Cecilio; that (2) Pullum-Cecilio defaulted on the underlying
note and (3) nonpayment by the Guarantors. See Branch Banking and Trust
Co. v. Broaderip, 2011 WL 3511774, 3 (S.D. Ala. Aug. 11, 2011) (“Every suit

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on a guaranty agreement requires proof of the existence of the guaranty
contract, default on the underlying contract by the debtor, and nonpayment
of the amount due from the guarantor under the terms of the guaranty.”)
Accordingly, because there is no genuine issue as to any material fact
in this case, Whitney Bank is entitled to a judgment as a matter of law in
accordance with Fed. R. Civ. P. 56(c).
c. Damages Calculation
Whitney Bank states that as of December 29, 2014, the deficiency
balance on the loan was $823,803.42 with accrued interest in the amount of
$14,399.15 (with a post-default rate $411.91 per diem), for a total principal
and interest of $838,202.57, plus costs of $2,900 for the appraisal fee, and
$250.00 late fee for a total amount due of $841,352.57 as of December 29,
2015. (Doc. 1; Doc. 16).
The Court finds that damages are due to Whitney Bank in the amount
of $823,803.42, the deficiency balance due at the time of default; plus interest
accrued at the time of default, $14,399.15; plus the $2900.00 appraisal fee
and $250.00 late fee; plus interest accrued from the time of default December
29, 2014 to June 15, 2015, in the amount of $69,612.79 (169 days x $411.91
per day), for a total of $910,965.36.
The Court also finds that post-judgment interest in this case should be
awarded at the federal rate prescribed by 28 U.S.C. § 1961 (a), rather than
the contractual default rate of 18%. Under federal law, “[i]nterest shall be

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allowed on any money judgment in a civil case recovered in district court.” 28
U.S.C. § 1961(a). The statute further provides that interest “shall be
calculated from the date of the entry of the judgment, at a rate equal to the
weekly average 1-year constant maturity Treasury yield, as published by the
Board of Governors of the Federal Reserve System, for the calendar week
preceding[ ] the date of judgment.” Id. Where, as here, the applicable
contracts do not contain express provision for post-judgment interest to
accrue at a rate different than set forth in § 1961 (a), the statutory rate
governs, as a matter of law. See, e.g., Vision Bank v. Garrett Investments,
LLC., 2012 WL 628915, *4 (S.D. Ala. Feb. 27, 2012)(“Because the Note does
not contain an express provision for a post-judgment interest rate, [the Bank]
is entitled to post-judgment interest only to the extent provided by § 1961
(a).”)
According to the most current weekly average of the Federal Reserve
Statistical Release H.15, dated June 15, 2015 and found at
www.federalreserve.gov/releases/h15/current, the average 1-year constant
maturity Treasury yield for the week ending June 12, 2015 was .28%. As
such, post-judgment interest shall accrue at the statutory rate of .28% from
this date forward.
III. ATTORNEYS FEES & EXPENSES
In addition to the unpaid principal, interest and default interest,
Whitney Bank seeks an award of attorney’s fees and costs. “Alabama follows

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the American rule, whereby attorney fees may be recovered if they are
provided for by statute or by contract …” Jones v. Regions Bank, 25 So.3d
427, 441 (Ala. 2009) (citations omitted); see also Battle v. City of
Birmingham, 656 So.2d 344, 347 (Ala. 1995) (same). The law is clear that
“provisions regarding reasonable attorney's fees are terms of the contracts
susceptible to breach.” Army Aviation Center Fed. Credit Union v. Poston,
460 So.2d 139, 141 (Ala. 1984). Here, the Renewal Note provides:
In the event Lender engages an attorney to render
services or advice incident to an Event of Default or
threatened Event of Default, or in the event this Renewal
Promissory Note is collected in whole or in part through legal
proceedings of any nature, then and in such case there shall
be added to the unpaid principal balance hereof all costs of
collection, including, but not limited to, reasonable attorneys’
fees.
(Buntin Aff., Exh. 13-2, at 10). The Guaranty Agreement expressly places the
individual Defendants on the hook for attorneys’ fees owed by Pullum-Cecilio,
L.L.C. under the Renewal Note. See Doc. 13, Exhs. C, D, E at 7) As such,
reasonable attorneys fees is an acceptable component of damages available to
Whitney Bank in this case.
1. The $126,202.88 fee request is improper
On summary judgment, Whitney Bank’s counsel claims that he is “of
the opinion that 15% of the outstanding balance of December 14, 2014, or
$126,202.88, is a fair, reasonable, and necessary attorneys’ fee to collect this
outstanding indebtedness, reduce it to judgment and enforce the judgment.”
(Doc. 13-3, Exh. 2 at 3). Yet, there is no evidence that counsel’s retainer

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agreement provides for a computation of fees based on a percentage of the
principal amount of the loan. Whitney Bank’s counsel states that the fee
arrangement is a “hybrid arrangement” whereby “Whitney advances hourly
fees on submitted Invoices, which are then offset against collection of
attorneys’ fees awarded by the Court.” (Id.)
Plaintiff’s contention that a 15% fee would be reasonable under
Alabama law, and its submission of plaintiff’s counsel statement in support of
the same, is unpersuasive. This District has repeatedly rejected hypothetical
percentage-based fee awards. See, e.g., PNCEF, LLC V. Hendricks BLDG.
Supply LLC, 740 F. Supp.2d 1287 (S.D. Ala. 2010); Whitney Bank v. Point
Clear Development, LLC, 2012 WL 2277597 (S.D. Ala. June 18, 2012).
Furthermore, the Renewal Note provides that Pullum-Cecilio pay “added to
the unpaid principal balance hereof all costs of collection, including, but not
limited to, reasonable attorneys’ fees.” (Buntin Aff., Exh. 13-2, at 10). The
plain reading of the contract language of “reasonable attorneys’ fees and
costs” means the actual fees and not a hypothetical, percentage based award
of $126,202.88. Whitney Bank does not owe its lawyers $126,202.88 for the
work performed on this case.
Attorneys’ fees must be reasonable. See, e.g., Willow Lake Residential
Ass’n, Inc. v. Juliano, 80 So.3d 226, 241 (Ala. Civ. App. 2010)(“Alabama law
reads into every agreement allowing for the recovery of attorney’s fees a
reasonableness limitation.”). Therefore, as a matter of law and contract,

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Whitney Bank may only recover its actual, reasonable attorneys fees. The
Court will neither rewrite the Renewal Note to insert language obligating the
borrower to pay 15% of the outstanding principal as an attorneys’ fee, nor
speculate that Whitney Bank’s lawyers agree to represent the Bank on a
contingency basis for a fee of 15% of the principal amount collected.
Therefore, the request for 15% of the outstanding principal as an attorneys’
fee is denied.
2. The Actual Award of Attorneys fees is proper
The Court now turns to the issue of whether actual attorneys’ fees are
warranted in this case. “Alabama follows the American rule, whereby
attorney fees may be recovered if they are provided for by statute or by
contract....” Jones v. Regions Bank, 25 So.3d 427, 441 (Ala. 2009) (citations
omitted). See also Battle v. City of Birmingham, 656 So.2d 344, 347 (Ala.
1995) (same). The law is clear that “provisions regarding reasonable
attorney's fees are terms of the contracts susceptible to breach.” Army
Aviation Center Fed. Credit Union v. Poston, 460 So.2d 139, 141 (Ala.1984).
See also Ierna v. Arthur Murray Int'l., Inc., 833 F.2d 1472, 1476 (11th Cir.
1987) (“When the parties contractually provide for attorneys' fees, the award
is an integral part of the merits of the case [ ]”). Under Alabama law, such
attorney's fees are recoverable; however, recovery is subject to Alabama's
imposition of a reasonableness constraint on all fee-shifting contracts, as a
matter of public policy. See, e.g., Willow Lake Residential Ass'n., Inc. v.

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Juliano, 80 So.3d 226, 241 (Ala. Civ. App. 2010) (“Alabama law reads into
every agreement allowing for the recovery of attorney's fees a reasonableness
limitation[ ]”); PNCEF, LLC v. Hendricks Bldg. Supply LLC, 740 F.Supp.2d
1287, 1294 (S.D. Ala. 2010) (rejecting claim for attorney's fees in amount of
15% of fund to be collected, where plaintiff made no showing of its actual
attorney's fee incurred in enforcing contract). Thus, Whitney Bank is entitled
to recover only its reasonable attorneys' fees and costs incurred in collecting
on Pullum-Cecilio’s debt.
The calculation of reasonable attorney's fees is clearly within the
sound discretion of the court. Dowdell v. City of Apopka, Fla., 698 F.2d 1181,
1187 (11th Cir. 1983); Kiker v. Probate Court of Mobile Cnty., 67 So.3d 865,
867 (Ala. 2010). In assessing the reasonableness of attorney's fee requests,
courts generally apply the “lodestar” method to obtain an objective estimate
of the value of an attorney's services. Norman v. Housing Auth. of City of
Montgomery, 836 F.2d 1292, 1299 (11th Cir. 1988); Dillard v. City of
Greensboro, 213 F.3d 1347, 1353 (11th Cir. 2000) (explaining that the
lodestar “is the number of hours (tempered by billing judgment) spent in the
legal work on the case, multiplied by a reasonable market rate in the local
area”). The value of an attorney's services is calculated by multiplying the
hours that the attorney reasonably worked by a reasonable rate of pay,
defined as “the prevailing market rate in the legal community for similar
services by lawyers of reasonably comparable skills, experience, and

22

reputation.” Blum v. Stenson, 465 U.S. 886, 895–96 n. 11 (1984). The party
moving for fees bears the burden of establishing the “reasonableness” of the
hourly rate and number of hours expended via specific evidence supporting
the hours and rates claimed. Hensley v. Eckerhart, 461 U.S. 424, 433 (1983);
American Civil Liberties Union of Ga. v. Barnes, 168 F.3d 423, 427 (11th
Cir.1999). The court may utilize its own “knowledge and expertise” to come to
an independent judgment regarding the reasonableness of requested
attorney's fees. Loranger v. Stierheim, 10 F.3d 776, 781 (11th Cir.1994).
When seeking attorney's fees, the prevailing party must not request
fees for hours that are “excessive, redundant, or otherwise unnecessary;” or
request fees for unsuccessful claims. Hensley, 461 U.S. at 434–35. When a
request for attorney's fees is unreasonably high, the court may “conduct an
hour-by-hour analysis or it may reduce the requested hours with an acrossthe-board cut.” Bivins v. Wrap it Up, Inc., 548 F.3d 1348, 1350 (11th Cir.
2008). Likewise, where the rates or hours claimed seem excessive or lack the
appropriate documentation, a court may calculate the award based on its own
experience, knowledge, and observations. See, e.g., Norman, 836 F.2d at
1299. Notably, “[t]he court, either trial or appellate, is itself an expert on the
question and may consider its own knowledge and experience concerning
reasonableness and proper fees and may form an independent judgment with
or without the aid of witnesses.” Id. at 1303 (citations omitted).

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Further, the lodestar figure established by the Court may be adjusted
by consideration of various factors including:
(1) the nature and value of the subject matter of the
employment; (2) the learning, skill, and labor requisite to its
proper discharge; (3) the time consumed; (4) the professional
experience and reputation of the attorney; (5) the weight of
his responsibilities; (6) the measure of success achieved; (7)
the reasonable expenses incurred; (8) whether a fee is fixed
or contingent; (9) the nature and length of a professional
relationship; (10) the fee customarily charged in the locality
for similar legal services; (11) the likelihood that a particular
employment may preclude other employment; and (12) the
time limitations imposed by the client or by the
circumstances.
Van Schaack v. AmSouth Bank, N.A., 530 So.2d 740, 749 (Ala.1988). See also
e.g. Pharmacia Corp. v. McGowan, 915 So.2d 549, 552–554 (Ala. 2004); Lolley
v. Citizens Bank, 494 So.2d 19 (Ala. 1986). These criteria are for purposes of
evaluating whether an attorney fee is reasonable but they are not an
exhaustive list of specific criteria that must all be met. Beal Bank, SSB v.
Schilleci, 896 So.2d 395, 403 (Ala. 2004).
a. Reasonable Rate
A plaintiff has the burden of supplying the Court with specific and
detailed evidence from which the Court can determine the reasonable hourly
rate for the work performed. Barnes, 168 F.3d at 427 (citing Norman, 836
F.2d at 1303). The Eleventh Circuit has instructed that a reasonable hourly
rate is “the prevailing market rate in the relevant legal community for
similar services by lawyers of reasonably comparable skills, experience, and
reputation.” Norman, 836 F.2d at 1299. In this case, the relevant legal

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community is Mobile, Alabama. See Barnes, 168 F.3d at 437 (providing that
“the ‘relevant market’ for purposes of determining the reasonable hourly rate
for an attorney's services is the place where the case is filed.” (citations
omitted)). The Court, which is familiar with the prevailing rates in the local
market (Mobile, Alabama), may act as its own expert and rely on its
“knowledge and experience” to determine the reasonableness and propriety of
the requested fees. Loranger, 10 F.3d at 781.
The rates requested include rates for time counsel ($275/ hour for 35
years of experience and $235/hour for unknown years of experience)
expended, for a total of 19.54 hours on this case. Specifically, Plaintiff seeks
$275.00 per hour for 16.64 hours of work by Alan Christian (35 years of
experience) and $235.00 per hour for partner Rick La Trace for 2.9 hours of
work (years of experience unknown). The Court, utilizing its own expertise in
this market as well as a review of prior fee awards, has determined hourly
rates and time that it deems reasonable and appropriate for the work
performed in this case. See, e.g., PNC Bank, N.A. v. Pounds Wrecking, Inc.,
2014 WL 4655435, *5 (S.D. Ala. Sept. 17, 2014); Vision Bank v. FP Mgmt.,
LLC, 2012 WL 222951, *3 (S.D. Ala. Jan. 25, 2012); Vision Bank v. Anderson,
2011 WL 2142786, *3 (S.D. Ala. May 31, 2011); Mitchell Co., Inc. v. Campus,
2009 WL 2567889, *1 and *17–18 (S.D. Ala. Aug. 18, 2009); Wells Fargo
Bank, N.A. v. Williamson, 2011 WL 382799, *4 (S.D. Ala. Feb. 3, 2011).
Regarding the requested $275/hour rate and $235/hour rate for

25

partners Alan Christian and Rick La Trace, the Court finds that this rate
does not exceed rates which have been found reasonable in this Court. See,
e.g., Ceres Envtl. Servs., Inc. v. Colonel McCrary Trucking, LLC, 2011 WL
1883009, at *5 (S.D. Ala. May 17, 2011) aff'd, 476 F. App'x 198 (11th Cir.
2012) (applying an hourly rate of $275 for an attorney with over 25 years of
litigation experience). As such, the Court finds the requested rates for
Christian and La Trace are due to be granted, as they are reasonable partner
rates previously awarded by this Court. The Court awards attorneys
Christian the rate of $275/hour and La Trace the rate of $235/hour.
b. Reasonable Hours expended
In determining whether the number of hours expended are reasonable,
the Court should not include any hours that are “excessive, redundant, or
otherwise unnecessary.” Norman, 836 F.2d at 1301. When awarding an
attorney's fee, the “[c]ourts are not authorized to be generous with the money
of others, and it is as much the duty of courts to see that excessive fees and
expenses are not awarded as it is to see that an adequate amount is
awarded.” Barnes, 168 F.3d at 428. The Court will not permit a party to
recover fees for hours that are excessive, redundant, or unnecessary, i.e.,
hours “that would be unreasonable to bill to a client and therefore to one's
adversary irrespective of the skill, reputation or experience of counsel.”
Norman, 836 F.2d at 1301 (emphasis omitted). While there is no per se rule of
proportionality, City of Riverside v. Rivera, 477 U.S. 561, 574 (1986), the

26

Supreme Court has made clear that such could still be considered a factor in
determining the reasonableness of a fee request. “The amount of damages a
plaintiff recovers is certainly relevant to the amount of attorney's fees to be
awarded under § 1988.... It is, however, only one of many factors that a court
should consider in calculating an award of attorney's fees.” Id. (citation
omitted). In sum, “[i]f fee applicants do not exercise billing judgment, courts
are obligated to do it for them, to cut the amount of hours for which payment
is sought, pruning out those that are excessive, redundant, or otherwise
unnecessary.” Barnes, 168 F.3d at 428.
In conjunction with the motion, Whitney Bank’s counsel submitted
billing records through February 2015. (Christian aff. Exh. A). Counsel for
Whitney Bank’s billing records (Christian aff. Exh. A) indicate that the
individuals worked on this case billed a total of 19.54 hours. (Id.) Specifically,
the billing records indicate that Mr. La Trace worked on the file 2.9 hours
and Mr. Christian, 16.64 hours. Upon closer inspection of the invoices, the
Court finds that the work was reasonable. Therefore, the Court finds that
19.54 hours billed is reasonable in this case. The lodestar amount is
$5,257.50 and the Court agrees with this calculation as an attorneys’ fee in
this case. The requested costs and expenses of $617.34 are adequately
documented and are also approved as reasonable. Adding attorney's fees and
costs to the loan balance previously found to be due and owing, the proper
amount of the judgment to be entered against defendants is $915,192.56.

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Counsel for Whitney Bank also claims that an additional 20 hours is
needed for the “hearing and subsequent entry of judgment” and
“approximately 100 hours with respect to execution on the judgment, postjudgment discovery of assets, collection and other related activities.”
(Christian aff. Exh. A at 2). However, Counsel cites no case law supporting
the award of future attorneys’ fees and the Court does not consider that
request at this time.
IV. TOTAL DAMAGES AWARD
In sum, Plaintiff established based on uncontroverted facts that it is
entitled to entry of judgment in its favor as a matter of law on its claims for
breach of the Renewal Note by defendant Pullum-Cecilio and breach of the
individual guaranties signed by Rebecca Pullum, Shan Cecilio, and Bart
Pullum. Damages have been proven in the following categories and amounts:
(i)

unpaid principal in the sum of $823,803.42, as
documented by paragraph 7 of the Buntin affidavit

(ii)

prejudgment interest in the sum of $14,399.15 for the
period of December 15, 2013 to December 29, 2014, on the
total outstanding principal of $823,803.42, per the Buntin
affidavit on paragraph 7.

(iii)

Prejudgment interest in the sum of $69,612.79 for the
period of December 29, 2014 through the date of entry of
this Order and Judgment, calculated at the contractual
default interest rate of 18% ($411.91 per diem) on the
total outstanding principal of $823,803.42 ($411.91 x 169
days)

(iv)

Reasonable attorneys fees and costs of $5,874.84.

(v)

The appraisal fee of $2900.00 and the late fee of $250.00.
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Bringing the total amount of damages due to $916,840.20.
CONCLUSION
For all of the foregoing reasons, it is ordered as follows:
1. Plaintiff’s Motion for Summary Judgment (Doc. 13) is
granted, and Plaintiff’s motion for attorneys’ fees (Doc. 13)
is granted, in part, and denied, in part.
2. Judgment will be entered in Plaintiff’s favor and against all
remaining defendants, jointly and severally, in the total
amount of $916,840.20.
3. Post-judgment interest will accrue on this sum at the
statutory rate of 0.28%;
4. A separate judgment will enter; and
5. This Order and the accompanying Judgment having resolved
all issues against all parties herein, the Clerk’s Office is
directed to close this file for statistical and administrative
purposes.
DONE and ORDERED this 15th day of June, 2015.
/s/ Callie V. S. Granade
UNITED STATES DISTRICT JUDGE

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